from the this-doesn't-stop-the-market dept

In a major ruling from the European Court of Justice, stem cells have been declared unpatentable in Europe. This is somewhat similar to the ongoing fight in the US over whether or not genes are patentable. Here, the ECJ noted that using stem cells for diagnostic purposes may be patentable, but the simple process of separating a stem cell from a human embryo itself, is not patentable. As with genes, I think it's the right decision that such things should not be patentable.

What I find unfortunate, however, is that confused scientists are attacking this decision, claiming that without patents, there will be no investment in stem cell research. It will be interesting (and something of a natural experiment) to determine if that's true. I'm going to guess that the end result will not be what these scientists are predicting. While investment from some big pharma firms may decline, I would bet that the actual usefulness of stem cells is about to go up. Take this complaint for example:

"We are funded to do research for the public good, yet prevented from taking our discoveries to the marketplace where they could be developed into new medicines.

"One consequence is that the benefits of our research will be reaped in America and Asia."

That's from Professor Austin Smith of the Wellcome Trust Centre for Stem Cell Research, University of Cambridge. But it's also totally bogus. Nothing in this ruling prevents anyone from taking the discovers to the marketplace where they can be developed into new medicines. This is a fallacy. Professor Smith might want to look up the history of the chemical and dye industries (many of which became today's pharma industry) in Switzerland and Germany when patents were either not allowed or greatly limited -- and learn that it actually helped bring more products to market because everyone could build on the research and do more with it to make it useful. You can still bring products to market, and the incentive is to keep innovating to bring even better offerings to market. And, by not limiting who can make use of these stem cells, you get much greater research efforts and much faster advancement.

Furthermore, as we've seen in the past, many research scientists have actually been complaining about how stem cells patents had massively hindered their research. Perhaps if Smith took the time to talk to some of those researchers he might realize the benefit from keeping stem cells and other genetic material unpatentable.

If the goal truly is to improve "the public good," then this is a fantastic ruling. It means that more smart people can do more with stem cells to make them useful.

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keeping stem cells and other genetic material unpatentable is a good idea.
Why should someone be able to patent genes !!! or Stem Cells.
If you make something new a new creation that is unique is a different story than a patent on GENES or STEM CELLS.
But we all know our government is corrupt and will bow down to the almighty dollar.

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I think it's horrible. Personally, my wife and I have created two brand new XX-style stem cells never before available. We are in the process of cultivating those stem cells into more mature forms. If we are unable to patent these new creations, then someone else might use our creations for their own personal gain and or pleasure. This distresses us greatly. A 21-year patent should be the minimum for my wife and I to keep others from using our stem cell creations.

Reaping the benefits of something around the world is what researchers should want, because that is the ultimate goal of research.

The only potential question is whether this will impact funding for commercialization. Unlike the dye industry, commercialization of stem cell and other treatments for human disease has huge entry costs, largely due to regulatory requirements and other red tape. It takes a lot of money, either public or private, to go through the process. When you work with startups in the biotech sector and you're trying to secure money to pursue research and approval for a promising technology, the first thing the investors want to know is what the patent strategy looks like.

So like many things it is a two-edged sword. You open up the beneficiaries of research on the one end, but may reduce investment in it in the first place.

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"the first thing the investors want to know is what the patent strategy looks like."

Perhaps part of the reason for this is that if they don't have patents, they will likely get sued by others who do. The legal (patent) costs associated with this could be part of the artificially high entry costs. Removing patents will reduce those legal entry costs.

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Of course investors are going to ask what a companies patent strategy is. It turned out that Google made a mistake by not having a patent strategy early on not because patents helped it innovate (it innovated just fine without them) but because not having patents opened it up to all sorts of infringement claims and it provided it with little cross licensing bargaining power and little authority to counter - sue those who sue them (or those who sue its affiliates) for infringement. That's partly why it's much easier now for Microsoft to frivolously go around and demand 'licensing programs' from those who sell androids and whatnot. Google doesn't have the patent portfolio to counter - threat Microsoft and give them reason not to participate in such silly behavior, so MS sees Google and its affiliates as one big defenseless target.

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When the main reason for having patents is defensive it calls into question the validity of the entire patent system. Hording patents as a defensive move does absolutely nothing to "promote the progress" as the Constitution mandates. Currently companies must divert money that could go into research into buying defensive patents. Small businesses without a horde of patents are blocked from entering the market; even if they have a patent on their product, there is probably a nexus of related patents that surround it and keep the small business from going into production. The current patent system is hindering progress, not promoting it.

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Freedom to operate is part of it, that is true. but remember that having a patent does not mean you are necessarily free to sell your product or that you can't be infringing the patents of others, so a patent by itself can't completely assure the investor of this.

But it is also about recovering the tremendous cost of getting the thing to market, including regulatory approval. Considering that many such ventures fail, without the ability to protect the product with patents many investors simply aren't willing to take the risk and will look to other industries to invest their capital.

I think you could address a lot of this by cutting down on the sheer cost of getting something to market. The big question is how to best do that while still ensuring adequate safeguards for the public.

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Getting rid of patents doesn't address the cost of going to market that investors bear and part of the reason they want to see a patent portfolio to begin with. The perceived necessity to patent, particularly in biotech and pharma, is due in large part to the costs of taking a product through the regulatory approval process. Getting rid of patents doesn't address that problem, and given the costs associated with it, it would just make it even harder for small companies and startups to get the investment they need. It would benefit the very large, entrenched powers because they already have the ability to fund the process.

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"It would benefit the very large, entrenched powers because they already have the ability to fund the process."

They're also the ones with large patent portfolios that they can use to keep newcomers out of a market. As mentioned, having a patent doesn't necessarily protect a small entrant from getting sued and it doesn't mean that he is not infringing on the patents of others who have other patents and small entrants can't afford large patent portfolios. Others with similar patents can still bring various products to market and a small entrant will not have the money to fight it in court either. So to say that it protects the defenseless small entrant is silly, it only protects them if they have the resources to pursue it, and who has more resources to defend themselves in court along with the larger patent portfolio to both defend themselves and to counter-sue?

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Here, the ECJ noted that using stem cells for diagnostic purposes may be patentable, but the simple process of separating a stem cell from a human embryo itself, is not patentable.

It seems fairly clear, you cannot patent the 'stem cell separation' process, but you CAN patent a process to use those cells for diagnostic purposes. That seems like a potential market. I think someone is looking for a deeper level of control (read profit).

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Yeah. The thing about the ruling is that it leaves open the treatment and the diagnostic use of stem cells, which is where a lot of the market is. The ruling just limits the ability to patent processes used in the primary scientific research.

So if you're working to the public good then why do you want to patent something that should be given to the public domain for the public good?

Sounds to me like some guys don't seem to understand the background of patents and the social contract there-of. Scientitists arent getting paid so that they can turn out "products", they're getting grant money so that they can solve problems. Nowhere does that include patents.

Ok, so by this person's logic their stem cell research was all being done for the public good, the patent is just a bonus to help them spread that public good around.

Yet at the same time, it would go be against the public good if people in America and Asia benefit from stem cell research.

Why? Because... there's only so many stem cells on the planet to save lives with duh! Do you want Europeans to die because Americans and Asians are selfishly using all the self cells to treat their own citizens!

Oh wait, you mean any two people can make more stem cells by fertilizing an egg?

Well... umm... then ok, it's really all about making sure my wallet gets fatter and throwing more red tape in front of everyone else's stem cell research, for their own good! Because everyone benefits if I get rich, even if it'll me another 50 years to get stem cell therapy working well enough to use it to treat people!

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Germany didn't allow patents? Didn't Albert Einstein work in the German patent office?

He worked in the Swiss patent office. And until 1912, Switzerland had a *VERY* limited patent system that didn't allow that many patents, and didn't allow any patents on chemicals/dyes etc. -- at a time when that was one of Switzerland's biggest industries.

Good.

I don't weigh in very often on IP issues, but the idea that genes or stem cells might be patentable is a direction I don't want to see science go. I'm also wary of the situation with GMO foods where cross-pollination happens in nature and then farmers are asked to pay fees even when they don't want these GMO varieties contaminating their own crops.

Stop comparing apples and oranges. Commercializing a "high-tech" invention costs little. Commercializing a medicine costs close to a billion dollars - not because of patents, but because of FDA/EMA regulations (for some reason people want their medicines to be safe - go figure). There are tons of molecules out there that will never be made into medicines because patent protection has expired and there are no alternative forms of ensuring exclusivity for investors. Sounds like this is the direction the EU now wants to go in with human embryonic stem cells.

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Stop comparing apples and oranges.

I don't believe anyone is.

Commercializing a "high-tech" invention costs little. Commercializing a medicine costs close to a billion dollars - not because of patents, but because of FDA/EMA regulations (for some reason people want their medicines to be safe - go figure).

You should do some research. Yes, that's part of the reason why the costs are high, and we're all for reforming that. If you look at the details it suggests that the FDA's process actually doesn't make us any safe/healthier and really is just a massive waste. That's not to say there shouldn't be safety testing, but the way it's done today is ridiculous.

There are tons of molecules out there that will never be made into medicines because patent protection has expired and there are no alternative forms of ensuring exclusivity for investors.

Bullshit. If some investors are too stupid to monetize without a patent, others will step up and make money themselves.

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Not to mention that pharma refuses to allow independent auditors to audit their costs.

"""# The industry fought, and won, a nine-year legal battle to keep congressional investigators from the General Accounting Office from seeing the industryâ€™s complete R&D records. (See Section IV) Congress can subpoena the records but has failed to do so. That might owe to the fact that in 1999-2000 the drug industry spent $262 million on federal lobbying, campaign contributions and ads for candidates thinly disguised as "issue" ads. (See accompanying report, "The Other Drug War: Big Pharmaâ€™s 625 Washington Lobbyists") """

If a private entity wants the government to provide a government established monopoly then the public should have a right to know how that money is being spent and where that money is going in order to better determine the effects of such a monopoly and the public benefits and losses. You can't have it both ways, you can't have an unregulated government established monopoly. If you want free market capitalism, then no patents. If you want patents, then there should be regulations and public oversight to ensure that those patents are justified. Of course pharma doesn't want that, likely because they know that their patents aren't justified.